Experiencing from at least 30 percent decline of orders in the home accessory market, the Gifts, Toys and Housewares Association of Exporters in Cebu (Cebu-GTH) is expecting recovery in the next 12 months.
Strong demand from the other markets outside of the United States, especially from Beijing, and Shanghai in China, as well as European countries, including Russia and Middle East will offset the order breakdown due to the US economic slowdown, said Cebu-GTH president Ramir Bonghanoy.
He said the industry has learned the hard way after losing some of its members, and workers in the last few years, after the US market started to weaken. This time, he said players are trying to reach out to non-US consumer base to sustain its business, and that the industry is giving itself one year to get to its feet again.
Of the US$30 million average home furnishing exports of the Philippines, about 40 percent of which comes from the GTH sector, Bonghanoy said although some companies are continuously trimming down their workforce, and adopting belt-tightening operational mechanism, the industry is seeing no more closures of companies in the next few months.
“We are luckier that, unlike the big furniture companies, we can easily adjust our operations depending on the market movement,” he said. Most of GTH member companies employ a maximum of 400 people to as small as 30 employees.
Because of the slowdown, Bonghanoy said many companies have been outsourcing their order requirements, and maintained minimal number of in-house workers.
Although, the industry is seeing a recovery in the medium term, he said players would have to continuously fight some challenges that are confronting the industry, such as minimum wage issue, improved design and product concept, among others.
During the recent Cebu-GTH general membership meeting held at the Laguna Garden Restaurant, the industry hit 100 company memberships, amid the difficult business environment. —Ehda M. Dagooc